The import – export sector in the Philippines is on the rise.
According to Philippine Statistics Authority (PSA), the country’s total trade grew by 8.6% in December 2017. This is better than the 5.8% full-year trade growth recorded in 2016.
Imports and exports posted 10.2 percent and 9.5 percent growth rates, respectively, exceeding the Development Budget Coordinating Committee’s emerging estimates (as of December 2017) of 9.0 percent for imports and 8.0 percent for exports.
Such improvement has made the Philippines one of the fastest growing economies in the world, according to the World Bank’s end-of-2017 edition of Global Economic Prospects.
As the country emerges as a growing economic hub, it is wise to ride the wave and make the most out of it by establishing an import-export business in the Philippines. Read on as we detail in this third edition of the Southeast Asia series the reasons why now is the best time to establish an import-export business in the Philippines.
Philippines export overview
The Philippines is one of the largest markets in Southeast Asia with an estimated 103 million people.
HSBC has forecasted that the Philippines could become the world’s 16th largest economy by 2050. The Philippines is now ranked 56th in the World Economic Forum’s Global Competitiveness Report. It has improved by 28 places in the last 7 years.
About 250 foreign companies are now doing business in the Philippines. Among these are well known brands such as Unilever, Shell, HSBC, Standard Chartered, AstraZeneca, Diageo, Arup, JCB, Marks and Spencer, River Island and Halcrow.
Benefits for companies exporting to the Philippines include:
- One of the largest English speaking countries
- Western goods and services are popular
- Expanding consumer base
- Gateway to other Asian markets, all within 4 hours flying time
Strengths of the Philippines market include:
- 13th largest country in the world in terms of population
- Economy boosted by over USD 24 billion in overseas remittances
- Strong services sector
- Skilled workforce and competitive wages
- Liberalised economy
The Philippine market can present challenges for foreign companies. The risks can be overcome, of course, but they do require a commitment in terms of time and resources.
- Bureaucracy, as paperwork requires many signatures before final approval
- Corruption, which is improving, but remains a significant problem
- Restrictions on foreign ownership of companies, land and investment in certain sectors
- Restricted participation in public procurement
- Restrictions on ability of foreign individuals to practise in some professions
You should hire a broker or local lawyer, or consult a company with established legal presence such as Boxme, to help you deal with the necessary formalities. A local partner or distributor may also be necessary.
The Philippines economy grew by 6.7% in 2017 following year-end strong performance in the services sector. The forecast is 6.8% and 6.9% for 2018 and 2019, respectively, which are among the best growth outlook in Association of Southeast Asian Nations (ASEAN), according to the Organisation for Economic Cooperation and Development (OECD).
The Philippines is a consumption driven economy. It has consistently positive economic growth and an expanding middle class who like foreign consumer goods.
Remittances play a major role in the Philippines economy contributing to growth. Almost a quarter of the country’s labour force works abroad.
TO BE CONTINUED…
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